[author: Timothy J. Horstmann]

A new and growing trend in the field of property tax assessment continued this summer, as school districts in the eastern part of the state filed what could be a record number of appeals of selected property owners’ tax assessments.  Montgomery County was an especially popular location for school district-initiated appeals, along with Northampton, Delaware, Chester and Schuylkill Counties.

The growth in the filing of such appeals may partially be the result of increasing efforts by property tax consultants to sell their services to taxing authorities.  The combination of cuts in state school subsidies, rising pension obligations, and new restrictions on the ability to raise millage rates has made school districts more receptive to such offers.  Often working on a contingency fee basis, consultants will offer to review a district’s tax rolls, identify high-value parcels that may be under-assessed, and make recommendations on appeals, all without charging any up-front fees.  For many cash-strapped schools, the offer may be too good to resist.

In an effort to prevent some of these appeals, in October 2011, State Senator David Argall introduced legislation which would prohibit a taxing authority from initiating such an appeal if the basis for the appeal was a recent sale of the property.  The proposed legislation, Senate Bill 1309, has since been amended to permit such appeals where the aggregate additional tax revenue to be gained from the appeal exceeds $10,000.  Thus the bill would not protect many commercial and industrial property owners.  The bill was assigned to the Senate Finance Committee in June 2012, with no further action taken to date.

While some property owners may be familiar with the requirements for initiating an appeal of their tax assessment, an appeal initiated by the school district presents unique challenges.  Property owners targeted by these appeals will face a number of difficult questions.  For instance, does a property owner need an appraisal at the hearing?  What can property owners expect from the school district by way of evidence at these hearings?  Are these targeted appeals even appropriate under the law given the statutory prohibition of “spot assessments”?

If your property has been challenged, please contact Bert Goodman, Randy Varner, Tim Horstmann or another member of the McNees State and Local Tax group to discuss how to defend against a tax increase.